REPUBLIC OF ALBANIA ALBANIAN DEVELOPMENT FUND

WORLD BANK

COMMUNITY WORKS PROJECT

OPERATIONAL MANUAL

February 1999

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ALBANIAN DEVELOPMENT FUND

COMMUNITY WORKS PROJECT OPERATIONAL MANUAL

Table of Contents

1 GENERAL OBJECTIVES AND PRINCIPLES. 4 ADF ORGANIZATION ................................. 21 ........................................................................ 1

4.1 THE ADF BOARD ..................................... 21 1.1 OBJECTIVES .............................................. 1 4.2 EXECUTIVE OFFiCE .................................. 21 1.2 WORKING PRINCIPLES ................................ 1 4.2.1 Executive office responsibilities ..... 21

2 INFRASTRUCTURE COMPONENT .............. 2 4.2.2 The Executive Director ................... 22 4.2.3 Administration and Finance Department

2.1 ELIGIBILITY AND TARGETING ....................... 2 ....................................................... 22 2. 1. 1 Eligible Applicant .............................. 2 4.2.4 The Infrastructure Department.. ..... 24 2. 1.2 Eligible Subprojects .......................... 2 4.2.5 .............................................................. 25 2.1.3 Regional Targeting ........................... 3 4.2.5 The MIS and Training and Information

2.2 IDENTIFICATION .......................................... 7 unit ....................................................... 25 2.2. 1 General ............................................. 7 2.2.2 Public Infrastructure in Rural Area ... 7

5 MONITORING .............................................. 25

2.2.3 Public Infrastructure in Urban Area .. 8 5.1 INDiCATORS ............................................. 25 2.2.4 Collective production infrastructures 8 5.2 REPORTING ............................................. 25

2.3 FEASIBILITY AND SELECTION ....................... 8 5.3 MONITORING AND INFORMATION SYSTEM .. 26 2.3. 1 Feasibility .......................................... 8 5.4 RECORDING AND ARCHIVING DOCUMENTS AND

2.3.2 Selection ......................................... 10 DATA ............................................................... 26 2.4 PREPARATION .......................................... 13 5.5 IMPACT ASSESSMENT SURVEyS ............... 27

2.4. 1 Contract between ADF and Applicant ........................................................ 13

2.4.2 Users' Committee ........................... 14 TABLES 2.4.3 Operation and Maintenance plan ... 14 2.4.4 Local Contribution. .......................... 14

Table 1 Poverty Coefficient.. .................................. 4 Table 2 Average size per subproject ..................... 4

2.4.5 Technical Design ........... ................. 15 2.4.6 Preparation Check list .................... 15

2.5 IMPLEMENTATION ..................................... 16 2.5. 1 Procurement of Civil Works ............ 16

Table 3 Poverty indexes and equivalent population per District .............................................................. 5 Table 4 Initial budget allocation per District (US$ 15.3 Millions) ................................................. 6

2.5.2 Contracting ..................................... 17 2.5.3 Supervision .......................... ........... 17 2.5.4 Payments ........................................ 17 2.5.5 Extra works, Addendum ................. 18 2.5.6 Hand over ....................................... 18

Table 5 Feasibility Check List.. ............................ 10 Table 6 Ranking Coefficients ............................... 11 Table 7 Preparation Check List ........................... 15 Table 8 Tasks of Infrastructure staff .................... 24 Table 9 Documents to be archived ...................... 26

2.5.7 Breaking of Contracts ..................... 19 2.6 SUSTAINABILITY ....................................... 19

2.6. 1 General ........................................... 19 2.6.2 Users' committee ............................ 19 2.6.3 Maintenance fund ........................... 19 2.6.4 Emergency repairs ......................... 20

FIGURES Figure 1 Identification in Rural Area ...................... 7 Figure 2 Feasibility ..... ............................................ 9 Figure 3 Selection ................................................ 10 Figure 4 Preparation ............................................ 13

3 LOCAL GOVERNMENT AND COMMUNITY Figure 5 ADF Organization .................................. 23 CAPACITY BUILDING COMPONENT ................ 20 Figure 6 Regional Organization ........................... 23

3.1 ELIGIBLE ACTiViTIES ................................. 20 3.1.1 Training for local governments ....... 20 3.1.2 Information center.. ......................... 20

3.2 ELIGIBLE ApPLICANTS .............................. 21 3.3 TRAINING PROGRAM ................................. 21 3.4 PROCUREMENT OF TRAINING .................... 21

1 GENERAL OBJECTIVES AND PRINCIPLES

1. This Operational Manual (the Manual) outlines operational guidelines and general procedures for activities to be carried out by the Albanian Development Fund (ADF) under the Community Works Project (CWP) financed by IDA ..

1.1 OBJECTIVES

2. ADF's overall objective is to improve small scale infrastructure in an equitable manner through Albania and promote private sector economic development.

3. ADF is the executing agency for the IDA­financed CWP.

4. The CWP's development objectives are: • To alleviate infrastructure bottlenecks by

rehabilitating small, sustainable, social and economic infrastructure according to the development priorities of local governments and communities.

• To build the capacity of local communities and local governments to promote local economic development.

1.2 WORKING PRINCIPLES

5. Autonomy Relations between ADF and the Government are governed by the Decision of the Albanian Council of Ministers, under which the ADF was established. The Board of Trustees is ADF's regulating body, and no other authority can influence or override ADF's choices of activities, apart from laws and regulations generally applicable to legal entities.

6. Impartiality I n its relations with third parties, such as communes, villages and sub-contractors, ADF shall practice no form of discrimination or preferential treatment and will apply exclusively the decision­making criteria and selection procedures described in this Manual. In order to avoid potential conflicts of interest, ADF staff cannot hold any commerical interest in, or exercise any responsibility in, the public or private institutions, that are maintaining commercial relations with ADF.

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7. Transparency Based on the provisions in this Manual, ADF shall seek to put in place transparent and controllable procedures that are simple and streamlined, but at the same time flexible enough to enable ADF to carry out its wide range of activities. Any deviation from these procedures must be approved by the Board and receive prior No Objection of the PartiCipating Donors.

8. Cost-Effectiveness ADF must conduct all its business in a cost­effective manner.

ADF shall seek to closely monitor and maximize the achievable benefits of its activities within budget constraints.

9. Sustainability of Infrastructures The maintenance requirements of Infrastructure subprojects shall be taken into consideration by ADF. In each case, contracts shall make provision for the operation and maintenance of subprojects. If fees can not be collected to operate and maintain the works, Maintenance Funds shall be created at a local level and used to maintain the rehabilitated infrastructures.

10. Environmental Consciousness The appraisal criteria set out in this Manual for selecting works explicitly refer to environmental considerations in project design and implementation. ADF's engineers are required to take into account the impact of prospective subprojects on the physical, biological and social environment of the concerned villages and municipalities and mitigate these impacts to the extend possible.

11. Annual Work Plan and Budget ADF shall submit an Annual Work Plan and Budget to the Board of Trustees and Participating Donors for approval. The Annual Work Plan and Budget shall be prepared in the form of a narrative, outlining ADF strategy, identifying institutional strengths and weaknesses, and specifying needs to be addressed through training. The Annual Work Plan shall be accompanied by a budget outlining the estimated amount of expenditure for each funding category, broken down by item. For the civil works component the geographic allocation of funds per district shall be provided and should reflect the allocation formula specified in this Manual. Every six months, ADF shall prepare a detailed Program for civil works and submit it to the Board of Trustees and Participating Donors for approval

2 INFRASTRUCTURE COMPONENT

2.1 ELIGIBILITY AND TARGETING

2.1.1 Eligible Applicant

12. Eligible applicants for subprojects include Local Governments and Local Associations.

2.1.1.1 Local Governments

13. Local governments are defined as the official elected councils of the Communes (in rural areas) and Municipalities (in urban areas). Local governments are expected to submit applications to ADF on behalf of their citizens.

2.1.1.2 Local Associations

14. Local associations can submit applications to ADF under the following conditions: • The association has a collective interest, • The association is established at village level, • The association has more than 10 members, • The association is more than one year old. • The application of the association is supported

by the Commune where the subproject is to be implemented and the application form is endorsed with the signature of the Head of the Commune.

2.1.2 Eligible Subprojects

2.1.2.1 General

15. ADF will promote and finance, through grants, local infrastructure subprojects. Infrastructure works will be based on the needs of the local population and will meet the following key objectives: • to improve sustainable local infrastructure; • to create employment; • to improve the environment; • to assist in the development of the private sector

(small and medium enterprises); • to provide support to local governments and

local organizations.

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16. Given these objectives, ADF shall only finance: • Public infrastructure, whereby requests are

submitted by local governments, • Collective production infrastructure, whereby

requests are submitted by local associations.

17. Private works, consumable equipment, or goods are not eligible subprojects.

2.1.2.2 Public infrastructure

18. Public infrastructure subprojects financed by ADF shall be under the ownership of the local government.

19. Eligible public infrastructure subprojects: • In rural areas:

=> Rural roads, (i.e. roads under the responsibility of the communes and not under the jurisdiction of the Ministry of Public Works),

=> Water supply networks, if these networks are not under the authority of a public utility company,

=> Commune-owned foot bridges and small bridges (less than 15 m),

=> Flood protection and sewage networks, => Public schools and health centers, provided

these facilities are already staffed, => Public markets, => Sanitation and environment infrastructure.

• In urban areas: => Streets and sidewalks, => Public schools and health centers, provided

these facilities are already staffed, => Public markets, => Flood protection and sewage networks, => Sanitation and environment infrastructure.

20. This will exclude the following: • Administrative buildings, • Religious buildings, • Infrastructure owned and operated by public

utility enterprises 1, such as: => Electricity networks, => Telecommunication networks, => Main water supply networks, => Main irrigation and drainage networks.

21. Others infrastructure works not listed above will be financed in exceptional cases with the agreement of the Board of Trustees and prior No Objection of the participating donors.

1 This limitation will not apply to limited investments on existing networks (electricity, water, ... ) in case of rehabilitation of streets or roads.

2.1.2.3 Col/ective production infrastructures

22. Collective production infrastructure sub· projects financed by ADF shall be submitted by local associations. Eligible works must: • have a direct impact on the economic situation of

both the association members and other citizens nearby.

• be managed and maintained by the association.

23. Eligible subprojects will include the following: • Irrigation networks not owned nor managed by a

public utility company, • Marketing infrastructure, • Storage facilities,

24. Subprojects not eligible for funding will include: • Religious buildings, • Non productive infrastructure, • Individually used infrastructure.

25. Others infrastructure works not listed above may be financed in exceptional cases with agreement of the Board of Trustees and the prior No Objection of the participating donors.

2.1.2.4 Subproject size

26. Average subproject size financed under the CWP shall be estimated in the ADF Infrastructure Department Annual Work Plan and Budget, which shall be agreed by the Board of Trustees and receive prior No Objection of the participating donors. ADF shall not finance subprojects with total costs including VAT and local contribution2

exceeding the following limits: • Public Infrastructure in Rural Areas:

US$ 80,000 equivalent • Public Infrastructure in Urban Areas:

US$ 150,000 equivalent • Collective Production Infrastructure:

US$ 80,000 equivalent

27. If a subproject requires funding greater than the maximum size indicated above, a No Objection shall be sought from the PartiCipating Donors prior Subproject award. A No Objection shall be requested only under exceptional circumstances and shall be supported by reasonable arguments and documentation for causes for the increased funding requirement.

28. Under no circumstances shall an infrastructure works be divided into several consecutive phases in order to avoid exceeding the maximum size limit.

29. The limits above shall be reviewed periodically

2 but not design and supervision costs.

3

and adjusted if necessary, subject to the agreement of the Board of Trustees and prior No Objection of the participating donors.

2.1.2.5 Subproject implementation

30. Subprojects shall be simple, avoid administrative complexity and negative environmental impacts. Subprojects shall be implemented within six months after the first payment.

2.1.2.6 Local contribution

31. ADF shall require counterpart financing from Local Governments or Associations to ensure that subprojects are demand driven, high quality, cost· effective, and sustainable. During implementation, the level of local contribution will be monitored. The local contribution shall be calculated based on the subproject pre-estimated cost, including VAT (but not design and supervision costs). The following minimum level of contribution are required: • for Public Infrastructure in Rural Areas

(applications from Communes): 10% of the subproject investment, including a minimum of 5% provided by the beneficiaries.

• for Public Infrastructure in Urban Areas (applications from Municipalities): 10% of the subproject investment.

• for Collective Production Infrastructure (applications from local associations): 20% of the subproject investment including a minimum of 10% provided by the beneficiaries.

2.1.3 Regional Targeting

2.1.3.1 Targeting methodology

32. In order to create a transparent mechanism to evaluate the overall allocation of ADF's investments in infrastructure, a system has been established to allocate funds per district (both rural and urban zones) based on population and poverty.

33. Each district has been evaluated using simple poverty criteria: • in rural areas, arable land per rural inhabitant; • in urban areas, percentage of unemployed.

34. Each district is then assigned two poverty coefficients (one each for rural and urban areas) ranging from 1 (least poor) to 5 (poorest). The poverty coefficients have been used to adjust the average funds allocation per inhabitant, as shown in the following table 1.

T bl 1 P rt C ff"· t a e ove ty oe IClen

Povenylndex Poverty Coefficient Adjustment to population

1 (least poor) 85.0%

2 97.5%

3 100.0%

4 107.5%

5 (poorest) 115.0%

35. The poverty coefficients and the equivalent population (Le. the actual population corrected by the poverty Coefficient) per district are shown in the table 3 on the next page.

36. To assure transparency and fairness, CWP funds would be allocated a priori among districts according to this targeting methodology and with 60% of the funds for rural area and 40% for Urban area. Allocation of funds will be made separately for Urban and Rural areas according to the following steps: • First, ADF will calculate the actual allocation per

equivalent population of fund spent from the beginning or to be spent in the next year by all donors per district with a breakdown by district.

• Second, ADF will exclude from CWP funding )i> districts which have received (or will soon

receive) more than twice of the national average,

)i> districts which received (or will soon receive) more than the national average, and are funded by specific program.

• Third, the available funds will be allocated to the remaining district proportionally to the equivalent .population with a minimum of one subproject per eligible District.

37. Table 4 (next page) gives the initial allocation of funds per District, based on a total of US$ 15.3 million and target size per subproject as shown

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in the table 2 below.

Table 2 Average size per subproject

38. ADF shall prepare Annual Work Plans and Six months Program and Budget on the basis of this targeting methodology.

2.1.3.2 Limitation per Applicant

39. ADF shall initially finance only one works subproject for any given applicant (commune, association or municipality), in order to test the motivation and implementation capacity of the local government. Additional subprojects may be undertaken if the initial subproject has been satisfactorily completed, the final payment by ADF has been made, and the infrastructure has been maintained adequately for for a minimum period of one year.

40. Any given applicant, shall never have more than one subproject financed by ADF underway at the same time, regardless of the source of ADF funding.

41. For works financed in rural areas, the following limits would be applied: • A maximum of one subproject per Association; • A maximum of 3 subprojects per commune; with

a maximum of US$160,000 (including VAT) investment per commune (Le. two times the maximum subproject size).

42. For works financed in urban areas, the following limits would be applied: • a maximum of 4 subprojects per municipality; • a maximum of US$300,OOO (including VAT)

investment per municipality (Le. two times the maximum subproject size).

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Table 3 Poverty indexes and equivalent population per District

17000 11 5 48

9200 5960 4 3 25 8411 5 11

7300 11898 3 1 26 1280 5 8

7300 8976 11 5 112 449 3 7

136 19667 4 3 85 1609 102

121 34 4 3 132 16491 4 131

44098 3 1 106 7363 3 102

12468 3 2 36 1909 3 32

6366 5 3 35 3506 5 19

4 2099 9 5 23 1063 5 5

36 19518 3 2 58 4002 4 40

10 6871 3 13 1348 4 11

80 30900 4 2 99 4185 60

23 12290 4 2 40 2264 4 26

28 4194 4 3 17 4440 5 33

79000 16 3611 17 5 72 3881 5 18

66000 28100 37 6741 4 3 28 9620 5 44

76800 57500 19 14760 4 3 58 3978 5 22

87000 82000 5 9299 9 5 94 1702 5 6

163750 117150 46 43433 3 1 88 3 47

53000 49 7064 7 4 53 5 5

49750 37 10054 4 2 33 3 12

77 300 56 5685 10 5 65 5 24

51000 39000 12 2654 15 5 45 5 14

36700 27700 9 6550 4 3 28 4 10

41400 27600 13 8313 3 2 24 4 15

83300 53550 29 6880 8 4 58 5 34

53550 42300 11 1825 23 5 49 4 12

71300 40000 11441 3 2 35 1 23

120400 21745 6 4 129 5 100

28850 21 6784 4 3 29 4 23

34550 16 6250 6 4 37 4 18

15 149100 411 19691 8 4 160 2 360

7 32700 14 3817 9 4 35 5 17

9 86700 115 27338 3 65 3 116

NE 4 North East 38 327 4 255100 213100 42000 18503 12 243 8584 20% 47

N 8 North 62 586 12 643850 434400 209450 64388 7 474 39020 19% 240

C 8 Center 81 750 16 1458350 656200 802150 162420 4 624 56121 7% 733

S 11 South 85 873 21 1019450 568000 451450 159313 4 495 48460 11% 458

SE 5 South East 40 417 7 433500 300250 133250 65848 5 290 12965 10% 120

Total 36 306 2953 60 3810250 2171950 1638300 470472 5 2126 165150 10% 1599

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Table 4 Initial budget allocation per District (US$ 15.3 Millions)

S Berat 10 90 420 6 2 74 375 3 N Bulqize 7 48 210 3 1 20 125 1

S Delvine 3 25 140 2 1 11 125 1

SE Devoll 4 26 140 2 8 125

C Durres 6 85 420 6 3 102 500 4 C Elbasan 20 132 700 10 3 131 625 5

S Fier 14 106 560 8 3 102 500 4

S Gjirokaster 11 36 210 3 2 32 125 1

C Gramsh 9 35 140 2 1 19 125 C Kavaje 8 58 280 4 2 40 125

SE Kolonje 6 13 70 1 2 11 125 1

SE Koree 14 99 490 7 2 60 250 2

C Kruje 4 40 210 3 2 26 125

S Kucove 2 17 70 1 33 125

N Kurbin 2 28 140 2 2 44 250 2

N Lezhe 9 58 280 4 22 125 1

SE Librazhd 9 94 490 7 1

C Lushnje 14 88 420 6 2 47 250 2

N Malesi e Madhe 5 53 280 4 5 125

S Mallakaster 7 33 140 2 2 12 125 N Mat 11 65 350 5 2 24 125

N Mirdite 5 45 210 3 2 14 125 C Peqin 5 28 140 2 1 10 125

S Permet 7 24 140 2 1 15 125

SE Pogradec 7 58 280 4 1 34 125

N Puke 8 49 280 4 2

S Sarande 6 35 210 3 2 23 125 N Shkoder 15 129 630 9 1 100 500 4

S Skrapar 8 1

S Tepelene 8 2 18 125

C Tirane 15 160 840 12 2

S Vlore 9 65 350 5 4 116 500 4

N North 62 474 2380 34 12 228 1375 11

C Center 81 624 3150 45 16 373 1875 15

S South 85 429 2240 32 21 435 2250 18

SE South East 40 290 1470 21 7 114 625 5

2.2 IDENTIFICATION

2.2.1 General

43. ADF will aim to have subprojects identified by the final beneficiaries, but without excluding local governments in the process.

44. The process of subproject identification will vary according to the type of applicant. The identification procedure for rural areas is depicted in the figure on the opposite page. In every instance, the identification procedure will follow two steps: • Information will be provided by ADF on how to

request subprojects. Information will be made through

);> public media, (papers, radio, television), );> public meetings at district level, );> public meetings at Municipality or

Commune level. • The applicant will make a preliminary choice on

the priority subproject to be submitted to ADF.

45. In districts where ADF is starting to work, (and once a year for other districts), a meeting will be held with all the representatives of communes, municipalities, interested eligible associations, and district representatives. During this meeting, ADF's Staff will present ADF's objectives and procedures and distribute copies of brochures and application forms to be provided to all villages.

46. The next step in the identification process relies on receipt of an official request from the local government (or association). This request must include the following information: • Name of the applicant • Subproject description • Date of the Local Government (or association

board) meeting during which the application has been discussed and approved.

• For Communes, copy of the villages applications.

47. ADF will record and enter in the Management Information System (MIS) the requests from all Local Governments and Associations. A letter is issued by ADF to the Local Government or Association to acknowledge the receipt of each request.

48. Identification tasks will be taken in charge by the Social Inspectors of ADF, with the participation of the Districts inspectors and under the supervision of the Regional Inspectors.

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2.2.2 Public Infrastructure in Rural Area

Figure 1 Identification in Rural Area

I ADF I IDENTIFI CATION

Information - Commune

! Village Village Village

~ One One One

Request Request Request per village per village per village

I

I ADFI -- Choice >- Commune

Priority Application

2.2.2.1 Information

49. ADF will provide information to local populations (I.e. village representatives) and governments (I.e. Commune Council) on how to request subprojects, as well as subproject criteria, conditions for financing (financial contributions, maintenance obligations), etc .. This information will be disseminated through written materials and meetings at commune level held by an ADF's Social Inspector with Commune Council and Village representatives. ADF Inspector will check that all village have participate in the meeting and received full information.

50. Based on the information provided by ADF, each village is required to submit in writing one priority subproject to the Head of the Commune Council. A copy of this request will be kept by the Commune.

2.2.2.2 Preliminary Choice

51. A public meeting will be held at the commune level, at which village chiefs will be required to present their village's priority subproject to the commune council and an ADF representative (Social Inspector) . The commune council will then select a priority subproject. ADF Inspector will check that all village have participate in the meeting and have equal chance to present their subproject.

52. Minutes of the meeting will be attached to the application and signed by the Head of the Commune Council and representatives of all villages. The application will also include copy of the village requests.

2.2.3 Public Infrastructure in Urban Area

53. Information ADF will inform Municipal governments about how to request subprojects, through written materials and meetings with the Municipal Council. Based on the information provided by ADF, Municipal Authorities will propose subprojects.

54. Preliminary Choice A public meeting will be held at the Municipal level, with the participation of the Municipal council and an ADF representative. The Municipal council will select a first priority subproject and a second priority subproject (in the event the first is not technically or· otherwise feasible). Minutes of the meeting will be attached to the application and signed by the Head of the Municipal Council.

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2.2.4 Collective production i nfrastructu res3

55. Information Information on how Local Associations may request subprojects will be made by ADF during the meetings held in Communes. (see above paragraph 223)

56. Preliminary Choice Based on this information, Local Associations will be requested to submit an application to ADF. This application will require the written agreement of the Authorities of the Commune where the subproject is to be implemented.

2.3 FEASIBILITY AND SELECTION

2.3.1 Feasibility

2.3.1.1 General

57. ADF will undertake a feasibility study (examining technical, financial, environmental, and social issues) of the priority subproject presented by the Applicant. This feasibility study will include: • a site visit to verify the subproject selection • a public meeting in the village (or Municipality)

to discuss subproject design, implementation, financial contribution and maintenance issues.

58. Based on the village (or Municipality) meeting and site visit, the ADF District and Social Inspectors will fill out a subproject feasibility form, which includes the principal technical, environmental, social and economical elements of the subproject.

59. Feasibility will be done by a team : ADF' District Inspector (in charge of the Technical and Environmental issues) an Social I nspector (in charge of the social and economical issues). This team will be supervised by the Regional Inspector.

3 This type of SubprOject will be submitted by Local Associations.

Figure 2 Feasibility

Priority Application FEASIBILITY

I ADF I Feasability Study

~ I Commune

'l ~ Village

Feasible Application

.(IAADF

Feasible Applications

Data Base

2.3.1.2 Technical feasibility and environmental impact

60. During the site visit, ADF's District engineer will check the subproject's technical feasibility. The technical and environmental feasibility study will include the following: • review of the present status of the

infrastructure, • description of the works, • number of users, • key limitations (e.g. land slides for a road,

availability of water for water supply or irrigation)

• land tenure of the infrastructure, • main quantities of works (for a road, length,

pipe culvert, supporting walls, etc), • pre-estimated cost based on the main quantities

and standard unit prices, • pre-estimation of the maintenance cost, • pre-estimation of benefits, • rapid assessment of the environmental impact.

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2.3.1.3 Social and economic feasibility

61. The village (or Municipality) meeting will allow local government representatives and ADF to discuss and check the socio-economic feasibility of the subproject. Special attention will be given to: • establishment of a User Committee, • local financial contribution, • maintenance arrangements.

2.3.1.4 Agreement of Regional Authorities

62. ADF shall coordinate with the relevant ministries and/or district authorities to comply with existing equipment master plans and yearly investment plans.

63. When the District Authorities are responsible for financing part of operating cost of the proposed subproject (e.g. teachers or medical staff), • ADF District Inspectors (with the participation of

the Social Inspector and under the supervision of the Regional Inspector) will meet with the regional authorities and shall verify, at the district level, the subproject's selection criteria.

• ADF will require a written agreement in the form of a letter signed by the head of the District.

2.3.1.5 Subproject feasibility form

64. After the site visit and village meeting, ADF's responsible Engineer will draft the subproject feasibility form including: • technical data and cost, • environmental impact and mitigation, • maintenance arrangements, • local financial contribution, • Commune (or Municipality) financial

contribution, • assessment whether or not the subproject is

feasible.

65. Whether feasible or not, the subproject feasibility form will be signed by authorities of the Commune and Village (rural infrastructure), Municipality (urban infrastructure), or Commune and Association (productive infrastructure), and will be entered into the ADF database.

2.3.1.6 Feasibility Check list

66. A project will be said feasible only if all the questions in the following check list (table 5) received positive answers. Related documentation is to be kept in the subproject file.

Table 5 Feasibility Check List

2.3.2 Selection

67. Selection of subprojects by ADF will take place every six months, based on the proposed feasible subprojects in the ADF database. The selection tasks will be made by the Head of the Infrastructure Department with the participation of the MIS specialist and the Regional and Social Inspectors.

2.3.2.1 Ranking of the Applications

68. Ranking of the feasible applications will be based on four main criteria (verified by District and Social Inspectors during the site visit) : • Technical criteria (e.g. the level of degradation

of the existing infrastructure); • Social criteria, (e.g. the number of users); • Economical criteria (e.g. economic impact of the

subproject); • Financial criteria (e.g. cost per physical unit or

per user).

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Figure 3 Selection

Feasible Applications

Data Base

Update Feasibility

Selected Applications (Work Plan)

SELECTION

69. The ranking methodology for the main types of subprojects in Rural Areas is shown in Table 6 next page. This methodology is to be tested, adapted and extended to other types of subprojects.

2.3.2.2 Six months Program

70. For any given district, approval of subprojects to be financed under CWP, shall take place every six months in order to ensure a sufficient number of subprojects for comparison. ADF's Head of Infrastructure Department will prepare the Six Months Program of subprojects to be financed under CWP on the basis of : • the ranking of the applications according as

described above; • the available funds per type of applicant and per

District (see above 2.1.3 Regional Targeting).

71. Subprojects to be included in the 6 Months Program will be visited (by the District Inspectors under the supervision of the Regional Inspectors) to update subproject feasibility form before the program is submitted to the Executive Committee.

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Table 6 Ranking Coefficients

PROJETS OF RURAL ROADS..,BRfDGES and FOOTBRIDGES

Technical Degradation Level

Social Beneficiaries

Economic Level of linking

Financial Cost (000) Leks/km

Social Beneficiaries

Economical Distance to the

Financial Cost per inhabitant

<15% 15 to 25 % 25 to 50 %

<500 500 to 1000 1000 to 1500

Village/Cultivated Village to Village Commune to areas Vii

>4 000 3500 3 4 000 3500 3 2 750

Note : Bridge or Road t non-existent coefficient =5

PROJECTS OF WATER SUPPL Y

<500 500 to 1000 1000 to 1 500

< 0,1 0,1 to 0,3 0,3 to 0,5

> 6 000 6000 to 4 000 4 000 to 3 000

Note: Average of travelling distance to accede to the resource.

Village without Water network coefficient =5

PROJECTS IRRIGA TlON and DRAINAGE

Technical Degradation <15% 15 to 25 % 25 to 50 %

Level

Social Number of farms <30 30 to 75 75 to 100

Economical Agricultural <30 30 to 75 75 to 100

superficies (ha)

Financial Cost per Hectare > 125000 85000 to 125 70 000 to 85 000 000

50 to 75%

1 500 to 3 000

Commune to Commune

2750 03 2500

1500 to 3 000

0,5 to 1 km

3 000 to 2 000

50 to 75%

100 to 150

100 to 150

50 000 to 70 000

>75%

> 3000

Main road to Commune

< 2 500

> 3 000

> to 1 km

< 2 000

>75%

> 150

>150

< 50 000

Technical Degradation Level

Social Beneficiaries

Economical Average distance of access

Financier Cost per m2

Technical Degradation Level

Social Beneficiaries

Economical Average distance of access

Financier Cost per m2

12

AF?:C>JECTS OF SCHOOLS

<15% 15 to 25 % 25 to 50 %

<50 50 to 100 100 to 150

< 0,5 km 0,5 to 1,0 km 1,5 to 3

> 30 000 25 000 to 30 000 20 000 to 25 000

Note: Average of distance on one travel

Absence of Health Center note =5

PROJECTS OF HEAL TH CENTERS

<15% 15 to 25 % 25 to 50 %

<500 500 to 1000 1000 to 1500

< 0,5 km 0,5 to 1,0 km 1,5 to 3

> 30 000 25 000 to 30 000 22 000 to 25 000

Note: Average of distance on one travel

Absence of Health Center note =5

50 to 75% >75%

150 to 250 > 250

3 t04 km >4km

15 000 to 20 000 < 15 000

50 to 75% >75%

1 500 to 3 000 > 3000

3 t04 km >4km

17000 to 22 000 < 17 000

72. For each subproject, three possibilities exist: • The Subproject is rejected if the Executive

Committee considers that the subproject does not meet the selection criteria (according to the feasibility study). The rejection will be registered in the MIS.

• The Subproject is considered acceptable, but is not included in the Six months Program because other projects are of better quality. The subproject is kept in the file.

• The subproject is included in the Six Month Work Plan and will be financed by ADF.

73. In all cases, a letter will be sent to the Applicant (Commune, Municipality or Association) indicating the decision of the executive Committee.

74. The Six Months Program submitted to the Board for approval and Participating Donors for No Objection will include the final list of subprojects to be implemented in the next 6 Months with the following information : • Name, type and location of the applicant; • Name and location of the subproject; • Type of infrastructure; • Pre-estimate cost of the works (as per

feasibility); • Ranking of the subprojects selected; • Investment per district per type of applicant and

per type of infrastructure.

75. In some special cases (e.g. an emergency), the Executive Committee may decide to finance a subproject in addition to the Six months Program. This will be done only with the previous agreement of the Board of Trustees and a No Objection by Participating Donor and where the following additional conditions are met: • the annual expenditures for these exceptional

cases are less than 1 0% of the investment budget of the infrastructure component.

• the subproject identification has to follow the same procedure as described above (Le. the subproject is to be identified at village level and to be agreed by the Commune Authorities and others villages in the same Commune)

• the subproject fulfills technical, environmental, social and economic criteria,

• the preparation procedure (described hereafter) will be the same as for other projects, particularly in relation to the involvement of users.

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2.4 PREPARATION

Figure 4 Preparation

Control

Selected Applications (Work Plan)

Detailed Design

PREPARATION

Commune

Village

Users Committee

Financial Contribution

2.4.1 Contract between ADF and Applicant

76. Once a subproject is selected in the Six Months Program, a contract will be signed between ADF and the Applicant (Commune, Municipality, or Association) to approve the preliminary allocation of ADF funds for the subproject and to define the respective obligations of ADF and the local government or association.

77. The Contract will include the following conditions: • Election of the users' committee (See Section

2.4.2); • Agreement on the local contribution and its

source of funding, (See Section 2.4.4); • Agreement between ADF, the local

government, and the users' committee on infrastructure maintenance arrangements (See Section 2.4.5).

78. The contract shall be signed by ADF's Executive Director, or by the person designated by the Executive Director for signature, and by the Chairman of the Commune, the Mayor of the Municipality or the Chairman of the Association. Contract will be prepared by the Social Inspectors with the participation of the District Inspectors and under the supervision of the Regional Inspectors.

2.4.2 Users' Committee

79. A users' committee, which shall be established for each rural subproject and, where appropriate, for each urban subproject, shall comprise a minimum of 5 persons (with at least one woman) elected by the users, and may include commune/municipality treasurer, local technician, or school director. For Collective Production Infrastructure works (e.g. irrigation subprojects), the Local Association (e.g. Water Users Association) shall be the users' committee.

80. The users' committee will be responsible • During the Subproject preparation for: collecting

the village financial contribution and participating in the review of the technical design with ADF District Inspector and designer.

• During Implementation for participating in the supervision and the hand over the works with ADF District Inspector and designer.

• After completion of the works for: participating in the management of the Infrastructure (See Section 2.6.2).

81. Social Inspectors (under the supervision of Regional Inspectors and with the participation of District Inspectors) will help the local community to set up the Users' Committee.

2.4.3 Operation and Maintenance plan

82. Arrangements for operation and maintenance (O&M) shall be agreed prior to subproject financing, and the arrangements shall be specified in the contract between ADF and the local government and before bidding of the works can start.

83. The following O&M arrangement are acceptable: • Local government budget allocation to cover the

O&M cost; • User's Committee fees (for instance an

irrigation scheme);

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• Fees or revenues collected by a private contractor in charge of managing the infrastructure (for instance a market). In this case, management contract will be awarded by competitive tender;

• District or State Government for staff (for instance a school);

• Mix of these solutions.

84. The Maintenance and operation plan will outline the following: • description and freqt:Jency of maintenance

works, • manpower requirements for these works, • estimated yearly cost, • average cost per beneficiary, • description of how fees will be collected to

cover minimum operation and maintenance costs.

• for private management, a model of the management contract;

• for District or State management, a written agreement of the authority in charge of O&M or staff.

85. Social Inspectors (under the supervision of Regional Inspectors and with the participation of District Inspectors) will help the local community in the preparation of the O&M plan.

2.4.4 Local Contribution

86. Given the severe lack of local investment budgets in Albania, the local contribution will be calculated on the basis of ADF cost estimate of the works including VAT but not design and supervision cost. The local contribution shall meet to the following minimums: • for Public Infrastructure in rural area,

(applications from Communes): 10% of the subproject investment, including a minimum of 5% provided by the beneficiaries.

• for Public Infrastructure in Urban area (applications from Municipality): 10% of the subproject investment.

• for Collective production infrastructures (applications from Local Associations) 20% of the subproject investment including a minimum of 10% provided by the beneficiaries.

87. The origin of the funds of the local contribution will be certified by the Local Government and recorded by ADF. This contribution may be provided: • for Public Infrastructure (applications from

Local Governments): by the commune or municipality budget, user fees or contributions.

• for Collective production infrastructures (applications from Local Associations) by the Association budget, Member fees or contributions.

88. The local contribution must be transferred to the ADF's bank account in Tirana before bidding of the works can start.

89. Social Inspectors (under the supervision of Regional Inspectors and with the participation of District Inspectors) will help the local Government and the User's Committee (if applicable) in the collection of the local contribution,

2.4.5 Technical Design

90. Infrastructure works subprojects shall be designed according to recognized engineering standards and other technical specifications requested by ADF. Technical design shall be done: • By an agreed engineer, for "technical works"

that exceed the technical capacity of the local government. Such technical works may include: water supplies (new water intakes in river beds, dams, large pumping stations), and roads (bridges over 10m). The engineer will be selected through National Shopping Procedure.

• By the Local Government's engineers or technicians· with the assistance of ADF inspectors in all other cases. In this instance, the design models and technical recommendations will be established by ADF.

91. ADF will finance the cost of the design and the supervision under CWP using the category 2 "Consultant's services, studies and training" as follows: • For technical works, the design and the

supervision cost will be less than 4% of the construction contract, with VAT.

• For other cases, the cost of the design and the supervision will be less than 2% of construction contract, with VAT.

92. ADF will check and approve all design documents. ADF will be considered as an agreed legal entity for the approval of technical designs. Given its responsibility for design approval, ADF will not be allowed to perform design on behalf of the Applicant.

15

93. The Technical Design, bill of quantities and estimated cost of the subproject will be approved and signed by the Local Government and the Users Committee representative.

94. Checking and approval of the Technical Design will be made by the District Inspector with the participation of the Social Inspector and under the supervision of the Regional Inspector.

2.4.6 Preparation Check list

95. ADF will not start bidding works unless the questions in the following check list (table 7) received positive answers. Related documentation is to be kept in the subproject file.

Table 7 Preparation Check List

Six Month WP

Copy of the contract

Minute of Committee election

Bank transfer document

O&M plan

Written agreement

Design documents

2.5 IMPLEMENTATION

2.5.1 Procurement of Civil Works

96. General The Local Government or Association shall procure private contractors using IDA bidding documents for National Competitive Bidding for Albania provided by the ADF and acceptable to IDA. ADF inspectors shall train and assist Communes, Municipalities and Associations to apply and document procurement procedures (see Section 3: Local Government an Community Capacity Building).

97. Bidding Commission. The Local Government or Association will set up a Bidding Commission, which must include at least one technician from the Local Government and one representative from the Users Committee. No member of the Commission may have legal relations with the bidders, and each member of the Commission must make a written statement to that effect before the bid evaluation commences. The Bidding Commission will be responsible for all bidding procedures. At least, one ADF representative (Regional Inspector) will participate to the Bidding Commission as an observer (without voting right). The Bidding Commission will keep a record of all documents and procedures. A copy of these documents will be kept by ADF in the subproject file.

98. Schedule of Bidding. Bidding shall be scheduled as follows: • Bid announcement: publication in two national

newspapers for at least two consecutive days. • Bidding documents will be available both in the

Local Government office and in the ADF office. Bidding documents will be available at the date of the first bid announcement.

• The deadline for accepting the bids shall not be less than 21 days from the last day of publication for contracts under US$ 80.000 and 30 days for contract over this value.

• Bids shall be valid for at least 60 days after the above deadline.

• Bidding Commission will have 15 days after the above deadline for reviewing bids and checking bid documentation.

16

99. Eligibility for Bidders. Any private enterprise legally registered in Albania shall be eligible to respond to a bid for infrastructure works, provided that the enterprise meets the following conditions: • The enterprise has not been involved in the

design of the works. • The enterprise is licensed for the type of work

bid, • The enterprise has performed similar type of

works during the last two years, • The enterprise has a minimum yearly turnover

(including VAT) of: ;... US$ 100,000 equivalent if the estimated

cost of the contract is more than US$ 40,000 equivalent and less than US$ 90,000 equivalent,

;... US$ 200,000 equivalent if the estimated cost of the contract is more than US$ 90,000 equivalent.

• The enterprise may have at most one one ongoing works under ADF's funding at any particular time,

• The enterprise must provide the information requested in the bidding documents in order for the bid to be considered responsive and eligible.

100. Award of Contract. The Bidding Commission will carefully review and check the eligibility of the bidders. All eligible bids shall be evaluated in accordance with the procedures established in the bidding documents, and ranking of the bids may only take into consideration price of works. The contract shall be awarded at all times to the lowest evaluated bidder. Unless there is prior agreement of the Board of Trustees and No Objection of Participating Donors, a contract shall not be awarded if the lowest bid is more than 115% of the estimated price.

101. ADF No Objection. Before notification of the award and signing of the contract, the commune, municipality, or association shall request ADF's no objection on the bidding procedures, the award, and the contract. If a No Objection is not provided by ADF for any reason, ADF shall not reimburse the Commune, MuniCipality or Association for the expenses related to unauthorized construction work. Checking and No Objection of the procurement will be made by the District Inspector with the participation of the Social Inspector and under the supervision of the Regional Inspector.

102. Unfair interference. In the event a commune, municipality or association unfairly interferes in the bidding procedures or bid evaluation, the bid shall immediately be canceled and the ADF shall not finance further infrastructure works in the commune or municipality. Bidders who have submitted false or fake documents or unfairly interfered with the bidding procedure will not be allowed to participate in any works financed by ADF for a period of one year.

2.5.2 Contracting

103. Once ADF has provided the No Objection notice on the bidding procedures and the award, and the contract, the Commune, Municipality, or Association will contract the Enterprise on the basis of the standard contract provided by ADF with the bidding documents.

104. The ADF's No Objection notice on the award to construction contract will be considered as an addendum to the contract between ADF and the Local Government or Association, as it will define the subproject cost, the name of the contractor and other information known only after a successful procurement.

2.5.3 Supervision

105. Communes and Municipalities are responsible for technical supervision of works. The Engineer responsible for the design will be also be responsible for the supervision of works. The cost of this supervision will be included in the contract with the Engineer as explained above (See Section 2.4.5 Technical Design).

106. In addition to the daily supervision of the works, the local supervisor will check and agree on the invoices issued by the Enterprise.

107. Although Communes, Municipalities and Associations are responsible for technical supervision of works, ADF District inspectors will visit all subprojects in execution on a regular basis to check the progress and quality of the works.

1 OB. ADF District inspectors will visit and check the works actually performed by the contractor for each invoice (See Section 2.5.4 Payments).

109. ADF staff shall design and implement a supervision system that assures that approved infrastructure works subprojects receive periodic

17

visits. Checking and approval of the supervision of the works will done by the ADF District Inspectors with the participation of Social Inspectors and under the supervision of the Regional Inspectors.

110. Both ADF Inspector and Local supervisor will be required to check (quantity and quality) and approve all the invoices issued by the Enterprise. Supervision reports will be draft for each audit missions (at least for each payment) and will be recorded by ADF in the Subproject file.

2.5.4 Payments

111. Payments will be made to the contractor by ADF in the name of, and on the behalf of, the Local Government or Association.

112. Payments will be made exclusively in Leks, (VAT included), on presentation of invoices, according to the following schedule. • Advance payment of a maximum of 20% of the

contract amount at signature of the contract. This advance payment will be reimbursed in 4 equal lump sums on the first 4 invoices.

• 4 successive payments after the completion of 20%, 40%, 60% and BO% of the works. These payments will be based on unit prices and actual quantities of works performed, as certified by work situation reports. On each payment, deduction will be made for reimbursement of the advance payment.

• The remaining amount of the contract will be paid at the completion of the work, as certified by the last work situation report and after provisional hand over of the works (which determines the exact quantities of work and the final amount of the contract). From this payment the following item will be deducted: )00- 5% of this total final amount as a guarantee

deposit. )00- Penalties, if applicable.

• 5% of the contract final amount (the guarantee deposit) will be paid to the contractor at the final hand over of the works, six months after the completion of the work, if, during that time, there are no defects or damages related to bad work practices.

113. Payments will be made by ADF within 21 days from the date ADF receive the invoice from the contractor, the invoice being checked and approved by both the local supervisor and ADF's District Inspector.

114. The Head of ADF Infrastructure Department will be in charge of certifying contractor invoices on the basis of supervision reports prepared by Districts Inspectors and transmitted and checked by Regional Inspectors.

2.5.5 Extra works, Addendum

115. As explained previously, payments are made on the basis of the actual quantities of works performed. As a general rule, no works can be done in addition to the contracted bill of quantity. No additional works can be initiated without the approval of the ADF' Supervising Engineer. ADF will not reimburse any extra works unless the following conditions are met: • These extra works are unforeseen and are

necessary to ensure the safety of the infrastructure (e.g. unforeseen land slide on a road),

• These extra works are not induced by dispute, or problems which can be resolved by the Local Government or the Users Committee.

• The cost of these extra works is less than 5% of the total cost of the subproject.

116. If one of these conditions is not met, ADF may: • break the contract; • ask the Local Government or Association to

sign an Addendum to the contract with the Contractor with a clear justification, definition and documentation of extra works.

117. Addendum will be check by the Design Engineer and receive a No Objection from ADF. ADF shall not reimburse for the expenses related to the Addendum without this Non Objection.

118. If the Addendum cost is more than 20% of the initial contract price, prior agreement of the Board of Trustees and No Objection of the participating donors will be requested.

119. Extra works (less than 5%) can be agreed by the District Engineer (under the supervision of the Regional Engineer). Signature of the addendum will be follow the same procedure that the initial contract.

18

2.5.6 Hand over

120. Hand over of the Subproject will be done by a Hand over committee including: • A representative of the Local Govern ment or

Association, • A representative of the Users Committee, • The local supervisor, • ADF's Regional, Social and District Inspectors, • A representative of the Contractor.

121. Upon completion of the works, a site visit of the works will be conducted by the committee to inspect: • the quantity of the accomplished works; • the quality of the accomplished works; • the environmental impact of the accomplished

works.

122. The committee will take a decision regarding satisfactory completion: • If the works appear to be satisfactorily

completed, a provisional hand over certificate will be signed.

• If defects on the works or environmental damages are observed, these defects or damages will be documented and rectification actions will be recommended. Provisional hand over will be postponed until the Contractor has corrected all the defects or damages.

123. Final hand over will occur on completion of the Six months guaranty period. Final hand over will be made by the same representatives stated above. After a satisfactory final hand over, documented in a final hand over report, the 5% guarantee deposit will be paid to the contractor.

124. Hand over will be taken in charge by the ADF Regional Inspectors with the participation of Social and District Inspectors and under the supervision of the Head of the I nfrastructure Department.

2.5.7 Breaking of Contracts

125. ADF reserves the right to break the contract if the commune, municipality or association fails to fulfill its duties or of it appears that the works cannot be satisfactorily completed in due time and cost.

126. I n circumstances where the contract must be broken, a detailed account of the expenses will be made and delivered goods and supplies will remain the property of the ADF. The commune, municipality or association will be responsible for the safe keeping of these goods and supplies until the ADF decides on their new allocation.

127. Moreover, if the failure comes from the side of ADF's contractual partner (e.g. the commune or municipality), the commune or municipality will lose eligibility for further funding from ADF's Infrastructure Works Program for a minimum period of one year.

2.6 SUSTAINABILITY

2.6.1 General

128. Subproject sustainability (Le. infrastructure maintenance) is a key objective of ADF. ADF inspectors shall be evaluated not only on their ability to promote high quality subprojects, but on their ability to assure the maintenance of subprojects by discussing and emphasizing the importance of maintenance with both local users and local governments, and by securing appropriate maintenance arrangements.

129. ADF staff shall design and implement a maintenance follow up system that will assure periodic visits to finished subprojects, including maintenance status reports. ADF Social inspectors (with the participation of District I nspectors and under the supervision of Regional Inspectors) shall continue to visit the subproject site on a regular basis (every 6 Months) up to a minimum of two years after subproject completion to verify that the infrastructure is been properly maintained as specified in the maintenance agreement. This information will be recorded by ADF in the subproject file and in the MIS.

19

130. In the event the infrastructure is not being sufficiently maintained in the opinion of ADF, and the local government does not immediately correct the problem, the ADF shall not finance additional subprojects in the commune or municipality for a minimum period of one year.

2.6.2 Users' committee

131. The users' committee shall be the local partner of the institution responsible for the subproject's operation and maintenance. The main tasks of the users' committee shall be: • Daily safeguarding of the infrastructure; • When required, assuring daily operation of the

i nfrastru ctu re; • When applicable: • helping the institution responsible for operation

and maintenance to collect users' fees; • managing the maintenance fund. • Settling disputes among the users.

132. In most cases, the Users Committee shall be responsible for daily operation and maintenance of the infrastructure. When users' fees can be collected, these fees shall be used to finance the cost of operation and maintenance of the infrastructure. If users' fees cannot be collected, a maintenance fund may be created.

133. ADF will provide training and assistance to Users' Committee (See Section 3: Local Government and Community Capacity Building). This is one of the tasks of ADF Social Inspectors.

2.6.3 Maintenance fund

134. According to the maintenance and operation plan, a maintenance fund may be established to finance the daily operating costs and maintenance costs for the rehabilitated infrastructure for one year. This fund (2% of the infrastructure cost) will be collected and managed by the Users Committee.

2.6.4 Emergency repairs

135. In some exceptional cases, ADF may finance emergency repairs of infrastructure under the following conditions: • The infrastructure has been rehabilitated under

ADF's funding, • The damages have been caused by unforeseen

events and not by lack of maintenance or misuse of the infrastructure,

• the repairs are beyond the financial and technical capabilities of the Users Committee,

• A written request must be sent to ADF by the Local Government or association,

• An approval is given by the Executive Committee,

• The required repair works are designed, bid, and contracted under the same procedures required for normal subprojects,

• The Users Committee will contribute 10% of the cost of the repairs,

• The annual expenditure for emergency repairs is less than 2% of the investment budget of the infrastructure component.

20

3 LOCALGOVERNMENTAND COMMUNITY CAPACITY BUILDING COMPONENT

136. Under the Local Government and Community Capacity Building Component, ADF will finance training that strengthens local capacity and complements the infrastructure improvements financed by ADF.

3.1 ELIGIBLE ACTIVITIES

3.1.1 Training for local governments

137. Training seminars for local governments will include: • competitive bidding procedures for works, • technical design of the works, • environmental issues, • economic and management issues, • maintenance issues, • workshops on ADF activities and procedures. • Training for communities

138. Training and assistance to communities will include: • organization of subproject maintenance, • collection of user fees, • organization of community associations related

to rehabilitated infrastructure (e.g. parent associations for schools),

• environmental improvements. • workshops on ADF activities and procedures.

3.1.2 Information center

139. Under this component, ADF will also establish an information center and database for local governments on: laws and regulations concerning local governments and local finance; information on local government experiences in other countries (translation of selected documents into Albanian); a database on NGO and donor programs available.

140. Under this component, ADF may also publish an information letter for Local Governments and Associations.

3.2 ELIGIBLE APPLICANTS

141. Eligible applicants will be ADF'spartners and ADF's staff, Le.: • Local Governments, • Local Associations, • Users Committees, • ADF's Staff • Local private contractors.

142. Promotion of this component will be done in Districts, Municipalities and Communes by ADF Engineers in charge of the Infrastructure Component.

143. Requests for training will be required in a written form. Priority may be given to local governments or associations having signed or performed infrastructures works financed by ADF.

144. Training will be free of charge for the trainers, and ADF will payor reimburse travel and limited per diem fees to the trainees.

3.3 TRAINING PROGRAM

145. Training for local governments and communities will be undertaken on the basis of six~ month training programs, prepared by ADF and approved by Participating Donors.

3.4 PROCUREMENT OF TRAINING

146. Training within the competence of ADF (e.g. competitive bidding procedures for works) will be carried out by ADF staff and consultants. Training costs will consist of: production of written training materials, transportation for ADF staff, room rental.

147. ADF may also contract with individuals, NGOs, and institutions to carry out training programs on behalf of ADF.

21

4 ADF ORGANIZATION

148. The ADF governing bodies are: • ADF Board, headed by the Chairperson of the

Board • The ADF executive office headed by the

Executive Director, accountable to the Board

4.1 THE ADF BOARD

149. The ADF Board is the supreme governing body of ADF. The Board guides and supervises the administration and operations of the ADF in accordance with the ADF charter and the operational manual.

150. The Board has the following main duties: • to approve the policies and general guidelines

regulating the Fund's activity • to approve the annual budget and work

program of the Fund • to approve the annual and quarterly reports. • to authorizes negotiations and to enter into

agreements with the Government of Albania and international or local financial institutions that assist ADF in ach ieving its objectives

• to review the reports of external auditors

4.2 EXECUTIVE OFFICE

4.2.1 Executive office responsibilities

151. The executive office carries out the following duties and responsibilities: • Promote ADF activities throughout the country • Conduct feasibility studies, support local

communities to form maintenance committees, enter into agreements with communes or local associations for financing subprojects, supervise implementation of subprojects.

• Monitor the impact of the ADF programs • Monitor the implementation of the program

budget and all financial activities related to subproject implementation

• Prepare and submit to the Board and participating donors the ADF annual budget, work plan and quarterly and yearly reports.

• Ensure that all activities are in compliance with the ADF Operational, Finance and Administration Manuals.

152. The executive office is headed by the executive director who is responsible for the management and coordination of all ADF activities. The executive director is appointed and removed by the head of the managing council.

153. The structure of the executive office is as follows: • The Executive Director, • The Finance and Administrative Department • The Infrastructure Department, comprising six

regional units (See Figure 5), • The MIS and Training and Information unit.

4.2.2 The Executive Director

154. The duties of the executive director are as follows: • to ensure that the ADF programs are meeting

their objectives • to implement decisions of the Board, • to employ and administer the staff of the ADF • to ADF expenditures in accordance with the

procedures described in this Manual • to represent ADF in all legal matters. The

Executive Director or his designated representative should be a signatory on all legal agreements between ADF and third parties.

• To delegate authority to members of the executive committee to the extent necessary for the efficient performance of the ADF.

155. The executive director forms the executive committee which is composed of the executive directors and heads of departments The executive committee functions are: • To approve or reject all request for financing

submitted to the fund. • Monitor ADF activities and ensure that it meets

it's objectives

156. The Executive Director of the ADF participates in the meetings of the Board but has no voting rights.

22

157. The Lawyer provides legal advice and assistance to the executive office on all matters related to the ADF and its activities, especially all agreements between the ADF and communes municipalities or local associations.

4.2.3 Administration and Finance Department

158. The Administration and Finance Department comprises two units and is headed by an Administration and Finance Director.

159. The Administration and Finance Manager will have the following tasks: • Oversees all activities of the Administration and

Finance Department, • Affects all ADF expenditures jointly with the

Executive Director, • Operates the ADF's Bank Accounts jointly with

the Executive Director, • Prepare monthly, quarterly and annual reports.

160. Administration and Finance Department will have the following tasks: • Develops and maintains the accounting system

in accordance with Operational, Finance and Administration Manuals,

• Reviews and verifies all request for payments from other ADF's Departments and Units,

• Ensures the proper integration of financial information in the Management and Information System,

• Provides necessary information for the preparation of annuls budgets and financial reports.

• Develops and implement the administrative policy,

• Develops and implement the ADF's personnel procedures,

• Assist the Executive Director in managing ADF staff,

• Organize the procurement of office goods, works services and supply on a competitive basis,

• Provides logistical support for the functioning of ADF,

• Develop and implement a centralized system for recording and archiving dQcuments and data.

23

Figure 5 ADF Organization Figure 6 Regional Organization

Board of Trustees Chairperson: Deputy Prime

Minister

..-

I Lawyer I Executive J Assistant I I'"" Director "I

+ Deputy Director .. I Assistant

I (PMU Director) "I

.. .. .. Information Infrastructure Finance & (3 persons) ( 30 persons) Administration

(17 persons)

Document Officer Director MIS Officer EU Financial Officer

Studies/Monitoring IDA Financial Officer Financial Assistant Personnel Manager

Translator (1) Housekeepers (1)

Guard (1) Filing Officer/Cashier

(1) Maintenance Officer (l)

Drivers (4+3)

.. .. .. .- .- .. Tirana Northern Northeast Central Southern Southeast

LCDPIIl Region Region Region Region Region (2) (7 ) (5) (5) (7) (4)

Project Chief Chief Chief Chief Chief Manager Inspector Inspector Inspector Inspector Inspector

(1) (1) (1) (1) (1) (1) Engineer Social Social Social Social Social

(1) Inspector Inspector Inspector Inspector Inspector (1) (1) (1) (1) (1)

District District District District District Inspectors Inspectors Inspectors Inspectors Inspectors

(5) (3) (3) (5) (2)

4.2.4 The Infrastructure Department

161. The Infrastructure Department comprises the Head of the Department, the regional inspectors, the Social inspectors and the District Inspectors

162. The Head of the Department will : • Oversee all activities of the Infrastructure

Department, • Prepare the Annual Work Plans and Six Months

Programs identifying the subprojects to be financed,

• Check and agree on the Procurement Procedure, contracts and payments of the works,

• Prepare monthly, quarterly and annual technical reports.

163. The Regional Inspectors are under the authority of the Head of Department. They will : • Organize and supervise the works of the Social

and District Inspectors, • Check the feasibility study of the subprojects, • Participate (as observer) in the procurement

procedure for civil works, • Review and agree on the invoices from

contractors (on the basis of work supervision done by the District Inspectors).

• Review and agree on possible extra works. • Participate in the Hand Over of the works

164. The Social Inspectors are under the authority of the Regional Inspectors. They will : • Promote the activities of ADF in the Districts,

Municipalities an Communes, • Participate (as observer) in the meeting at

commune or municipal level for the preliminary choice of projects to be financed,

• Help the local communities in their relations with ADF,

• Check the social feasibility study of the subprojects,

• Help the local community in setting up the Users' Committee,

• Help (and check) the local community in collecting the local contribution,

• Help (and check) the local community in maintenance of the infrastructure.

165. The District Inspectors are under the authority of the Regional Inspectors. They will : • Promote the activity of ADF, • Participate in all the field works in promoting,

identifying, preparing and implementing the

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subprojects. • Be the contact person between ADF and its

partners (Municipalities, Communes, Associations) ,

• Check the technical and environmental feasibility study of the subprojects,

• Review and agree on the technical design of the Subprojects,

• Supervise the works in name of ADF.

166. The table 8 here under gives the tasks of each member of the Infrastructure Department for the steps of the project cycle.

Table 8 Tasks of Infrastructure staff

LEGEND Supervision In Charge of Participation

4.2.5 The MIS and Training and Information unit

167. The Management and Information System (MIS) specialist is in charge of: • Maintaining and Updating the MIS of ADF, • Managing information flows within ADF

necessary for its effective functioning, • Providing necessary information for the

preparation of reports.

168. The Training and Information specialists will: • Identify and asses the training needs of ADF's

staff, and partners (Local Governments, Associations and Contractors),

• Arrange for the implementation of training with corresponding institutions,

• Manage and update the Information Center, • Dispatch information on ADF activities and

other topics, • Prepares ToR for special training when

necessary,

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5 MONITORING

5.1 INDICATORS

169. Key Performance Indicators for measuring development objectives are: • Number, types, and physical quantities of

subprojects financed; • Number of subprojects that are operational and

maintained one and two years after rehabilitation;

• Number of beneficiaries/users of improved infrastructure, and their satisfaction level;

• Average cost per subproject and per beneficiary/user;

• Increased effectiveness of local governments and increased capacity of communities, as measured by beneficiary surveys.

170. Some of the performance indicators are quantitative and will be monitored through the Monitoring and Information System. Qualitative indicators will be estimated through beneficiary assessment surveys.

5.2 REPORTING

171. ADF will submit to ADF's Board of Trustees and Participating Donors quarterly and annual reports, which will include: • Committed and disbursed funds for

infrastructure works per district, applicant, type of project and donor;

• Number of applications received, appraised, rejected and contracted;

• Activities of the Information and Training Component (number and type of training, number and type of trainees);

• Status and number of staff, • Operating cost per category and per donor.

5.3 MONITORING AND INFORMATION SYSTEM

172. The Monitoring and Information System (MIS) is designed to support the management and the monitoring of the Infrastructure Component of the project and to present necessary information to ADF's staff, ADF's Board and participating Donors.

173. The MIS will include 3 data bases: • Resource Targeting data base • Subproject Portfolio data base • Unit costs database data base

174. Resource targeting data base This data base will facilitate the targeting of subprojects. It should include the following data: • Social and economic statistics by District

(population, arable land, unemployment), • Funds allocated and committed per Donor, per

district and per type of applicant (Urban, Rural), • Annual targets/allocations per district for ADF's

overall investments in infrastructure.

175. Subproject portfolio database This is the core of the MIS, it is used to manage and monitor the "subproject cycle" of all ADF's infrastructure investments from identification to hand over. This database will be used to: • Rank feasible applications in order to prepare

the works programs, • Monitor the portfolio and prepare reports on : • SubprOjects per type, Applicant and Districts, • Average costs per type of subprojects, • Average preparation and completion time, • List of subprojects not performed in time or

budget, • Activity per engineer.

176. Unit costs database This database is a tool for project preparation, it will comprise: • A unit costs database to store the basic

resource prices. This data base will be used to prepare detailed cost estimates,

• A standard unit costs database to record aggregate average prices. This database will be used to prepare cost estimates at feasibility stage.

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5.4 RECORDING AND ARCHIVING DOCUMENTS AND DATA

177. ADF will develop and implement a centralized system for recording and archiving documents and data. The next table gives the list of documents and data to be archived during the subproject cycle.

Table 9 Documents to be archived

Procurement of Civil Works Tender Documents Paper announcements Minutes of the bidding commission Winning bid ADF'sNo

Payments

5.5 IMPACT ASSESSMENT SURVEYS

178. Impact assessment is an integral part of the Infrastructure Component of the project. Impact assessment surveys will provide reliable feedback information useful to improve the performance of ADF. Impact assessment surveys will focus on : • Final Beneficiary assessing of the extend to

which the local community's expectations have been met,

• Institutional assessing the role and responsibilities of local governments,

• Technical assessing the quality of the works and any adverse impact on the environment,

• Environmental assessing the level of impact on environment and the level of care taken during the subproject cycle to mitigate any negative impact

• Economic assessing the economic impact of the rehabilitated infrastructure

• Sustainability assessing the sustainability of the works, maintenance, users committee involvement,

179. Impact assessments will be carried out on both quantity and quality basis. The surveys will study a minimum of 5% of the subprojects realized in the year representative in terms of region and type of subprojects.

180. Impact assessments will be contracted to independent conSUltants.

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181. Impact Assessment Surveys should be completed using small sample sizes. The sampling should include the following: • The subproject applicant • The ADF staff involved in the project • Contractors who performed work related to the

project .• Individuals who performed the labor in

implementing the project • Local leaders (formal and informal) • Officials involved in subproject implementation

and/or are responsible for maintaining the facility

• Members of the community; depending on the nature of the project, this sample should be specified according to: income, gender, age, employed/unem ployed, landholderslland less

• Beneficiaries satisfaction with respect to the outcomes of the project

• Cost per beneficiary per type of subproject

182. Methodologies suitable for the impact assessment survey include conversation, interviews, direct observation and participant observation.